REA GROUP LIMITED Investor & Analyst Presentation For the half-year ended 31 December 2014 5 February 2015 Tracey Fellows Chief Executive Officer Owen Wilson Chief Financial Officer
Delivering on our purpose 2
Half-year highlights + 25 % + 35 % + 12 % 20 % holding Total revenue $261.5m EBITDA $144.5m Monthly site traffic - Australia 44.6m Move, Inc. investment $231.3m + 60 % + 34 % + 34 % 19.9 % holding Australian listing depth revenue $159.8m EPS 71.8c Interim dividend 29.5c iproperty investment $108.7m 3
Positioned for growth Core Business Adjacent Markets International Expansion Deliver best digital real estate experience in market Continued product innovation Compete in adjacent markets Utility connections Finance leads Develop network of world leading property portals Leverage expertise Revenue diversification 4
Progress on strategy Customers Agents are at the centre of everything we do Strong adoption of lower cost subscription packages Simplified pricing structure fewer price points Depth Accelerated take-up of our premium listings Introduction of market-based pricing Consumer Innovative products are driving record traffic and engagement 103% increase in visits to Sold site section (1) 56% increase in visits to Neighbourhoods site section (1) (1) December 2014 compared to December 2013 5
realestate.com.au s lead extends nearest competitor outperforming the competition lead extended year on year (5) 33.2m monthly visits 9.9m 3.3x 16% average traffic to realestate.com.au main and mobile sites (1) 85% Our share of combined minutes spent on realestate.com.au and our nearest competitor sites 15% 5.6x 30% (2) 230,429 Average monthly time on site (000's minutes) 41,290 for realestate.com.au main and mobile sites (2) 000's minutes 5.6x 30% People spent 6.9 minutes on the site (3) Average time per session on the site 4.2 minutes 1.7x 12% Over two thirds of our monthly audience do not visit our nearest competitor (4) Comparison of app visits with competitors are not available and for that reason are not included in these statistics. (1) Nielsen Online Market Intelligence Home and Fashion Suite Total Traffic for Audited sites average monthly visits for the half-year ended 31 December 2014 for the main and mobile sites of realestate.com.au compared to domain.com.au. (2) Nielsen Online Market Intelligence Home and Fashion Suite Total Traffic for Audited sites average monthly time on site for the half-year ended 31 December 2014 for the main and mobile sites of realestate.com.au compared to domain.com.au. (3) Average monthly time on site from note (2) above, divided by average monthly visits from note (1) above.(4) Nielsen Online Ratings, December 2014 for realestate.com.au compared to domain.com.au. (5) Utilising current year methodology and applying to prior year results, this result is the growth in out performing the competition half-year on half-year. 6
Australian site visits by platform Combined Australian site visits by platform Platform (million visits) HY 2015 HY 2014 Growth Main sites (1) 24.8 22.5 10% Mobile sites & Apps (2) 19.8 17.2 15% Total 44.6 39.7 12% (1) Nielsen Online Market Intelligence Home and Fashion Suite Total Traffic for Audited sites average monthly visits for the half-year ended 31 December for main sites for realestate.com.au, realcommercial.com.au and property.com.au combined (including international traffic to sites). (2) Mobile sites visits and App visits combined. Mobile visits source: Nielsen Online Market Intelligence Domestic Report Suite (July 2013 to December 2013) and Home and Fashion Suite (July 2014 to December 2014) Total Traffic for Audited sites average monthly visits for the half-year ended 31 December for mobile sites for realestate.com.au and realcommercial.com.au (domestic traffic to mobile sites only). App visits source: Adobe Omniture SiteCatalyst average monthly visits for the half-year ended 31 December for residential and commercial apps visits (including international traffic to apps). 7
Product innovations Agent Profiles Connections 1Form Share Property Profiles Connecting Pilot to Digital rental Start your Watch activity for consumers and automate utility applications property journey property like yours agents connections 8
International footprint 9
Progress in Europe Launched new mobile site in Italy saw significant increase in unique visitors Continued expansion into Northern France Increased agent numbers Increased listing volumes and traffic Increased ARPA European key metrics Metric HY 2015 HY 2014 Growth Total revenue ( m) 15.4 13.9 11% EBITDA ( m) 3.5 1.8 94% Average Monthly ARPA ( ) 186 174 7% Average Monthly Visits (000's) (1) 10,292 8,878 16% Listings (000's) (2) 798 682 17% + 16 % + 11 % + 11 % Monthly site traffic Italy (1) 9.4m Monthly site traffic Luxembourg & France (1) 0.9m Increased Italian listings (1) Adobe Omniture SiteCatalyst average monthly visits for the half-year ended 31 December for Italy (casa.it) and Luxembourg & France (athome.lu, athome.de, atoffice.lu and immoregion.fr) combined (main and mobile site visits, includes international traffic to site). (2) REA internal statistics at 31 December 10
Asia & North America IPP holds market leading position in Malaysia, Hong Kong and Indonesia Asia is one of the fastest-growing real estate markets with a overall population over 500 million Operates in largest real estate market in the world $14 billion spend on real estate advertising in the USA with less than $1 billion spend between 3 largest online real estate players IPP has local management expertise and there is excellent potential for long-term growth across this region The Squarefoot business is now included in iproperty s operations making it clear leader in Hong Kong. Move has exclusive and perpetual right to operate realtor.com, the official site of the National Association of Realtors (NAR) A leading platform for consumer search with the most accurate and timely for-sale listings data Opportunity to leverage our digital real estate expertise and News Corp s content, distribution and marketing strengths. 11
Group performance overview core operations Core operations ($m) HY 2015 HY 2014 Growth Revenue 261.5 209.4 25% EBITDA (1) 144.5 106.8 35% EBITDA margin 55% 51% 8% EBIT 131.4 96.3 36% NPAT from core operations 94.7 70.7 34% Cash balance 41.9 286.3 (85%) Earnings per share (EPS) cents 71.8c 53.7c 34% Dividend per share (DPS) cents 29.5c 22.0c 34% Reconciliation to Financial Statements ($m) HY 2015 HY 2014 Growth NPAT from core operations (2) 94.7 70.7 34% Gain on sale of marketable securities 31.2 Tax on gain on sale of marketable securities (9.0)) Share of losses of associates (0.3)) Gain on sale of discontinued Squarefoot business 9.8 Reported NPAT 126.4 70.7 79% (1) Information additional to IFRS measures contained in this presentation is derived from the Interim Financial Report for the half-year ended 31 December 2014. (2) Core operations are reconciled to the Interim Financial Report on slide 20. 12
Growth across all segments Group revenue EBITDA from core operations ($m) (1) HY 2015 HY 2014 Growth Australia 144.9 111.8 30% Europe 5.1 2.7 92% Asia 0.4 (0.4) n/a Corporate (5.9) (7.3) 19% Total segment EBITDA 144.5 106.8 35% (1) Core operations are reconciled to the Interim Financial Report on slide 20. 13
Operating results 14
Australian key metrics Revenue category ($m) HY 2015 HY 2014 Growth Listing depth revenue 159.8 100.0 60% Subscription revenue 38.2 55.5 (31%) Media display 37.7 31.6 19% Other 0.7 1.0 N/M Result not meaningful Total revenue 236.4 188.1 26% Metric HY 2015 HY 2014 Growth Average monthly ARPA ($) 3,046 2,490 22% Paying agents (number) (1) 9,664 9,210 5% Total listings ('000) Dec 2014 Dec 2013 Growth Total buy listings (1) 429 503 (15%) * Total rent/lease listings (1) 218 212 3% Total listings for December (1) 648 715 (9%) * Variance includes the discontinuation of realbusiness listings and market trends (1) REA Internal Statistics for realestate.com.au and realcommercial.com.au combined for December. 15
Group cashflow 16
Group capital expenditure 17
For personal use only Our team is key to our success
Supplementary information
Financial comparatives Core operations HY 2011 HY 2012 HY 2013 HY 2014 Fin Stats HY 2015 Group results $m Growth $m Growth $m Growth $m Growth $m Growth $m Revenue from core operations 114.3 24% 134.6 18% 161.4 20% 209.4 30% 261.5 25% 261.5 Gain on sale of marketable securities 31.2 Total revenue & other income 114.3 24% 134.6 18% 161.4 20% 209.4 30% 261.5 25% 292.7 Operating expenses (66.4) 22% (75.1) 13% (84.2) 12% (102.6) 22% (117.0) 14% (117.0) Share of losses of associates (0.3) EBITDA 47.9 28% 59.5 24% 77.2 30% 106.8 38% 144.5 35% 175.4 EBITDA Margin 42% 44% 48% 51% 55% Depreciation and amortisation (4.5) 34% (7.2) 60% (9.1) 26% (10.5) 16% (13.1) 25% (13.1) EBIT 43.4 27% 52.3 20% 68.1 30% 96.3 41% 131.4 36% 162.3 Net finance income 1.7 3.2 4.5 4.6 2.9 2.9 Earnings before tax 45.1 31% 55.5 23% 72.6 31% 100.9 39% 134.3 33% 165.2 Tax on gain on sale of marketable securities (9.0) Income tax expense (13.9) (14.4) (21.1) (30.2) (39.6) (39.6) Net Profit from continuing operations 31.2 35% 41.1 32% 51.5 25% 70.7 37% 94.7 34% 116.6 Gain on sale of of Squarefoot business 9.8 Net Profit 31.2 35% 41.1 32% 51.5 25% 70.7 37% 94.7 34% 126.4 Dividend per share 10.0 100% 12.5 25% 16.0 28% 22.0 38% 29.5 34% 29.5 Earnings per share (EPS) 24.8 39% 31.6 27% 39.2 24% 53.7 37% 71.8 34% 95.9 EPS from continuing operations 88.4 HY 2015 20
Sustainability & community HY 2015 highlights: Developed formal sustainability framework to manage our social and environmental impacts Benchmarked our performance in the Dow Jones Sustainability Index, London Benchmarking Group and CitySwitch program Launched the Because We Care program - empowers staff to contribute to the community through matched giving, volunteering and community grants Hack Day dedicated to social issues including homelessness REA announced a 3 year, $3 million partnership with Australian charity HomeGround, including a new Rapid Rehousing Fund. This is part of a larger community investment strategy which will prevent 1,000 Australians from homelessness each year. 21
Key Australian products
Residential product hierarchy Source: REA Internal Data Warehouse. This is an average based on activity on realestate.com.au between 1 Sep - 30 Sep 2013. Our property sample includes suburbs that only had Premiere Property, Highlight Property, Feature Property and Standard ads during the same time period 23
Agent focus Lead generator Own leads in your suburb Brochure mock up tool Create vendor brochures personalised for each listing presentation Agent Profiles Be the go to agent in your area 24
For personal use only Commercial & Developer products Commercial product hierarchy Source: Omniture SiteCatalyst Average November 2012 - February 2013 Project Profiles 25
Visit our investor site at rea-group.com Disclaimer: The material herein is a presentation of non-specific background information about the Company s current activities. It is information given in summary form and does not purport to be complete. Investors or potential investors should seek their own independent advice. This material is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of a particular investor. These should be considered when deciding if a particular investment is appropriate.